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Federal Budget spares tourism

Tony Abbott

Tourism Australia has been spared from massive mooted cuts in last night’s Federal Budget, with AUD$130 million in base funding and AUD$13.5 million for the Asia Marketing Fund heading the organisation’s way.

Accommodation Association of Australia CEO Richard Munro said he was delighted that the Abbott Government had shown faith in tourism by rejecting drastic recommendations made by the National Commission of Audit to halve funding for Tourism Australia and integrate into a government department.

“The accommodation industry is set to receive a tremendous boost from the news that Tourism Australia will be retained as Australia’s dedicated international tourism marketing organisation with its funding maintained,” he said.

“While other sectors were targeted for cuts by the Government, the Budget outcome is clear recognition of the importance of tourism to the Australian economy.

“It enables Tourism Australia to continue to carry out the valuable task of increasing visitor numbers to Australia.

“The support for tourism from the Abbott Government will directly benefit all tourism accommodation businesses, including major international hotels in Australia’s capital cities, small motels in regional areas and B&Bs.

“At a time when Australia is facing increased competition from major Asian destinations for overseas visitors, the Budget announcements about Tourism Australia is welcome news that should set the industry up for growth, resulting in more jobs for Australians.

“The commitment to Tourism Australia has the potential to offset any drop in consumer sentiment which may occur in the coming weeks and months.”

Tourism Accommodation Australia (TAA) Managing Director, Rodger Powell, was similarly thankful the cuts weren’t put through the budget.

“Following the release of the Commission of Audit report, TAA called on the Government to ignore the recommendations relating to tourism marketing, and to increase net spending on tourism because of its potential to boost export earnings and create sustainable jobs,” he said.

“We are pleased that the Government has maintained Tourism Australia’s resources, as they have demonstrated considerable success in growing the inbound market in recent years. We also welcome the allocation of additional funding for marketing efforts in Asian growth markets, with Chinese visitors expected to generate over $13 billion in tourism revenue by 2020.

“The announcement of the new Tourism Demand Driver Infrastructure grants program with the States is particularly welcome.

“TAA did not believe that funding individual tourism and hospitality enterprises through the TQUAL and TIRF schemes was an equitable or efficient use of scarce funding. To provide funding for ‘new carpets in old motels’ was never going to drive demand, where as the Tourism Demand Driver Infrastructure Grants programme will benefit all operators through development of projects such as convention centres, port facilities, museums, galleries, theatres and other demand-driver attractions.

“A positive example of this is the $150 million allocated to the Gold Coast to invest in infrastructure to host the Commonwealth Games. This will have a long term impact on all accommodation and tourism operators in the region as it will significantly increase the Gold Coast’s ability to attract and create future major events and conferences.

“Scott Morrison is to be congratulated for saving over $2 billion through the stopping of illegal arrivals, and the creation of the new Border Protection Agency will drive further efficiencies. We believe that some of these savings should be invested in upgrading the visa processing system and the efficiency of the overall arrivals experience to enhance Australia’s global competitiveness.

“The expenditure on road infrastructure will also benefit the tourism and hospitality sectors as some 70% of tourism is domestic and a large percentage of that is self-drive holidays.

“While overall, we are happy with the Budget and applaud Minister Robb for his efforts to support the sector, it is disappointing that the Australian Network TV service is being axed because that built awareness of Australia as a destination in our key growth markets in Asia. It will mean that greater direct funding will be required for tourism marketing in the future if we are to maintain our visibility in these highly competitive markets,” Powell said.

TTF Chief Executive Ken Morrison said the maintenance of tourism funding in the 2014-15 Federal Budget is a good sign the Abbott government understands the capacity of tourism to be an economic development strategy for Australia.

“The government has wisely decided to reject the Commission of Audit recommendations to slash Tourism Australia funding, however further investment is needed to fully capitalise on the boom in Asian travellers,” Morrison said.

“The government has identified tourism as one of five National Investment Priorities and we welcome that as a sign the government understands that tourism is an economic development strategy for Australia.

“The government needs to back its rhetoric with action to help Australia better capture the benefits of the booming Asian travelling class.

“The tourism industry should benefit from the continuing strong growth in revenue from the passenger movement charge – which is a direct result of increased tourism.

“The PMC will grow by AUD$58 million this year and deliver more than $900 million into government coffers in 2014-15 and more than AUD$1 billion annually after that.

“Additional support for tourism marketing and investment is needed if Australia is to reach its Tourism 2020 goal of doubling overnight tourism expenditure to $140 billion by the end of the decade.

“Tourism has been identified as one of five super-growth sectors that can contribute an additional AUD$250 billion to the national economy over the next 20 years, especially with heavy manufacturing declining and the mining investment boom waning.

“Australia’s AUD$110 billion tourism industry already supports 543,000 direct jobs in 283,000 tourism businesses nationwide and with the right policy frameworks in place, tourism will grow even faster, providing economic prosperity and job and business opportunities across the country into the future.

“We look forward to the establishment of the Australian Border Force, which will have the task of delivering an improved passenger experience for the growing number of international visitors to Australia.”

The National Tourism Alliance (NTA) has also welcomed the Abbott Government’s budget announcement that Tourism Australia’s funding for marketing Australia internationally will be spared from cuts, and will in fact see a bit of a boost.

“Tourism is a sound investment for the whole economy”, said John Hart, Chairman of the NTA. “We know that for every dollar tourism earns directly in the Australian economy, it value adds an additional 92 cents to other parts of the economy. This means that if tourism continues to grow and invest, there will be a very positive flow on effect to the whole economy through stimulating businesses, creating jobs at all levels, and bringing in dollars from overseas.

“By giving these businesses the support of having a national marketing agency, it means that for the Government’s investment of around $130 million a year, we see international visitors spend around AUD$30 billion in Australia. With the growing number of visitors from China, it’s a real vote of confidence in the tourism industry for the Government to boost its existing investment in improving the experience for Chinese visitors, and promoting Australia’s brand at Australia Week in China.”

Summary: what the budget means for tourism

Tourism Accommodation Australia’s
FEDERAL BUDGET SUMMARY 2014-15
Tourism-related measures

Tourism Australia
Tourism Australia’s Budget for 2014-15 has been largely maintained from 2013-14. TA has been allocated $129.8 million compared with $130.3 million last financial year.
The Government has reaffirmed its support of TA by providing increased and direct allocation of the Asia Marketing Fund to TA to capitalise on emerging opportunities in Asia. Staffing for TA is forecast to rise from 198 to 204.
Minister for Trade and Investment Andrew Robb said the Government is committed to infrastructure development and brand promotion of TA especially in growing markets like China.
Robb said the Government has identified tourism as one of five National Investment Priorities with particular emphasis on international demand and investment to grow the tourism and hospitality sector.
“Australia is open for business, open for visitors and open for tourism,” Mr Robb said in a statement.

Tourism and international marketing measures
The Government will provide $10.1 million over four years to continue the Approved Destination Status (ADS) tourism arrangement between China and Australia. The ADS supports Chinese tourism in Australia and supports Tourism Australia to promote Australia as a tourism destination.
The Government has committed $43.1 million over four years to implement a new Tourism Demand Driver Infrastructure grants program. The project offers funding to States and Territories for infrastructure projects that encourage international and domestic tourism.
This will be funded by redirecting revenue from the Tourism Industry Regional Development Fund and the T-QUAL accreditation scheme.
$2 million has been allocated to support Australia Week in China and in 2015 and 2016.
$600,000 will be spent “transitioning” responsibility for T-QUAL from Government to industry.

Streamlining passenger processing
The Government will implement enhancements to Australia’s border protection services starting in 2014-15 within the existing Australian Customs and Border Protection Service including through improved trade and passenger facilitation by implementing more efficient processes.
This will occur from 1 July 2015, when the Australian Customs and Border Protection Service will be consolidated into the Department of Immigration and Border Protection to create a single agency.
The Government re-iterated its early tourism initiatives, highlighting the freezing of the Passenger Movement Charge which was increased under the previous Labor Government.

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